From FT Alfalfaville:
Rotten tomatoes.
Remember the Spac craze?
Back in February, it seemed we could barely open our inbox without a fresh press release from yet another blank cheque company announcing a merger with a pre-revenue business with unknown economics. Nearly every time, their merger decks promised the world. And by the world, we mean highly optimistic forecasts of 2025 revenues.
Why make such forecasts? Well, because they could. As a Spac deal is technically a merger, and not a tightly regulated IPO, companies were able to throw out blue sky projections for their businesses without falling foul of the SEC. (For now, anyway.)
One of these companies was AppHarvest — an agritech firm that specialises in farming tomatoes and lettuce indoors — which completed its merger with Novus Capital back on February 2 at a $1bn valuation which quickly rose to over $3.5bn. As stocks tended to back then.
Now, we have no real view on indoor farming bar that, given the Netherland’s wild success in implementing it, it sounds like a good idea to us on paper. What we do have a view on, however, is the deck from the analyst day back on December 15.
Here’s the key slide:....
....MUCH MORE
In addition to the bolded link on SPAC projections, above, we also saw Fortune's Term Sheet, April 7: "For Today's SPACs, 2024 Will Be The BEST YEAR EVER"
And a couple posts on AppHarvest:Oct. 1, 2020
Now the Farmers Are Going Public Via SPACs
And EBITDA by 2025.
When you are forecasting five years out it's probably a good idea to factor in the small but not zero chance of the Chinese Tomato Blight ravaging the world's vines.
(I made up the name for the blight, I have no idea what ails tomato plants)
And February 3, 2021:
ICYMI: Indoor Farming Company AppHarvest Came Public Via SPAC (APPH)
